Recent analysis from Santiment highlights that XRP and Ethereum have entered the “undervalued” zone, as indicated by their 30-day Market Value to Realized Value (MVRV) Ratio. The firm observed that the 30-day MVRV has turned negative for several prominent cryptocurrencies, including Bitcoin, Ethereum, XRP, Cardano, and Chainlink, meaning that many recent buyers of these assets are currently facing unrealized losses.
On Sunday, XRP dipped to a low of $1.8 before recovering slightly above $1.9. Santiment’s data shows that both Ethereum and XRP are deeper in negative territory compared to Bitcoin, suggesting they have been significantly affected in the market downturn.
The MVRV Ratio is a useful metric that compares a cryptocurrency’s market capitalization with its Realized Cap, which values tokens at the spot price from their last recorded on-chain transaction. This analysis helps provide insight into how much capital investors have allocated to an asset versus its current market value. When the MVRV Ratio is negative, as it is for the aforementioned coins, it indicates that the average investor is operating at a loss.
According to Santiment, when the MVRV Ratio enters negative territory, the asset is deemed “undervalued.” The firm explains that this scenario presents a potential entry opportunity for investors, as it indicates that the competition among traders may be at a disadvantage due to their current losses. The analysis further specifies that a lower 30-day MVRV signals a lower risk for opening or adding to positions in these cryptocurrencies.
Within its latest report, Santiment categorized a reading of up to -5% as “mildly undervalued.” Presently, Bitcoin is listed at 3.7%, while XRP’s MVRV stands at -5.7% and Ethereum at -7.6%, indicating a more pronounced undervaluation for these assets. In particular, Chainlink is cited as facing the most significant losses for 30-day buyers, marked at 9.5%.
As XRP’s price rebounds above the $1.9 mark, the sentiment around these undervalued cryptocurrencies may foster a potential turnaround, inviting interest from investors looking to capitalize on market fluctuations.